By Grace-Marie Turner, Galen Institute
Consolidation of large hospitals and health systems is on the political and policy radar screens of both Republicans and Democrats, offering a rare opportunity for action in a polarized Congress.
Janet Trautwein, who heads the National Assn. of Benefits and Insurance Professionals, explains how consolidation harms patients in “Healthcare Concentration Is Far From What the Doctor Ordered.”
Ninety percent of the nation’s hospital markets were considered “highly concentrated” in 2017, with many more mergers since then.
This cuts costs for hospitals but the savings rarely are passed along to consumers. Hospital prices go up 6 to 20 percent when one merges with or acquires another, Trautwein writes. That leads to higher premiums but not a coincident increase in the quality of care.
The bureaucratization of medicine makes it extremely difficult and risky for physicians to remain in independent practice. Three out of four doctors now are employed by large hospital systems or health plans.
They turn over scheduling, billing and negotiations with insurers to these conglomerates in exchange for a salary and some support staff.
Medical blogs show how this is decimating physician morale as they are forced to see eight or more patients an hour with the “system” recommending expensive tests like vascular studies and abdominal ultrasounds they don’t necessarily believe are needed.
Instead of having a nurse on staff to answer patient calls, the calls may be rerouted to call centers overseas and to having patients directed to urgent care centers (which the systems also own).
What to do?There is no silver bullet solution to reform how $4.3 trillion in private and public money is spent on health care every year. But it is important to begin.
Three key House committees have been working all summer to hash out details of an important health reform bill to be introduced today, the “Lower Cost, More Transparency Act.”
The House Energy and Commerce, Ways and Means, and Education and the Workforce committees have negotiated a package that focuses on health care price transparency, site-neutral payments, extending funding set to Community Health Centers, the graduate medical education program, and other health programs.
We will have more on this effort after the final bill is introduced, but signs of agreement on the problem, both among Democrats in Congress and left-of-center think tanks, are promising.
The Third Way, for example, has a new report that explains: “Out-of-control hospital prices are part of a vicious cycle where hospital consolidation drives up prices and subverts the competition needed to keep costs in check. In turn, higher costs undermine the adequacy of Medicare payments to hospitals, which leads more hospitals to consolidate.”
And the Progressive Policy Institute also has launched a new center on Competition Policy to be headed by Dr. Diana Moss, an expert in anti-trust policy whose mission is “to advocate for strong competition enforcement and policy.”
While we don’t always agree on solutions, agreeing that hospital consolidation is a major cost driver that is impacting the entire health system is an important start.
Grace-Marie Turner runs the Galen Institute, a public policy research organization that she founded in 1995 to promote an informed debate over free-market ideas for health reform.